The Importance of a Business Plan for a Small Business
A small business owner who has not yet prepared a formal business plan may be taking an unnecessary risk. A well-written, thorough plan will help entrepreneurs organize their thoughts and identify important aspects of the business that they might otherwise overlook.
According to The Small Business Administration (SBA), one of the major benefits of developing a formal business plan is that it allows business owners to take stock of their own strengths and weaknesses, as well as opportunities and challenges facing them in forming or expanding their businesses. It also provides valuable information for lenders, partners, investors, and others interested in supporting your enterprise with money or other resources.
The SBA notes five basic elements that should appear in every formal business plan: Mission statement; vision statement; executive summary; business description; and market analysis. The information in each of these sections helps establish the goals of the business, as well as the strategies and resources needed to achieve those goals.
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The Importance of a Business Plan for a Small Business Article Summary
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1. Mission statement: A mission statement describes the purpose of your business, while also serving as an expression of the philosophy guiding your company’s activities.
2. Vision statement: The vision statement expresses where you want to take your enterprise in the future, while providing insight into how you plan to accomplish your mission.
3. Executive summary: This section should tell readers exactly what they need to know about the contents of your formal plan without trying to provide too much detail or long explanations.
4. Business description: Your business description should include general information regarding organizational structure, products and services that will be available, special qualities or capabilities that will set your business apart from competitors, management team information, and information about your company’s legal structure.
5. Market analysis: Your market analysis will include an overview of the current business environment, including industry trends, competition, government involvement in your sector or region, customer demographics and buying habits, product line offerings of competing businesses in your field, and predictions for future growth potential in the markets you might serve.
A small business owner who has not yet prepared a formal business plan may be taking an unnecessary risk. A well-written, thorough plan will help entrepreneurs organize their thoughts and identify important aspects of the business that they might otherwise overlook. According to The Small Business Administration (SBA), one of the major benefits of developing…